Low mortgage rates could pave way for equity release schemes

Many homeowners are currently taking advantage of historically low mortgage rates, which could be giving them the opportunity to store up extra equity in their homes.

Mortgage-holders are increasingly opting to remain on their lender's standard variable rate (SVR), according to new research from Unbiased.co.uk.

Almost a third (31 per cent) of homeowners are currently on an SVR mortgage, it revealed, compared to just 23 per cent in January 2009.

Best buy SVR mortgages are still offering lower interest rates than the best buy fixed-rate options, according to the website.

"With the number of mortgage deals slowly increasing, homeowners need to make sure they aren't missing out on getting the best deals before the base rate starts to rise again," said Karen Barrett, chief executive of Unbiased.co.uk.

Meanwhile, statistics published by the Bank of England on March 9th showed that the average cost of a two-year fixed-rate mortgage deal had fallen to its lowest level since July 2003.

The rate stood at 3.88 per cent in February 2010, compared to 3.97 per cent the previous month, 4.35 per cent in February 2009 and 5.74 per cent in February 2008.

Ashall Glover Financial Services advising on equity release schemes